Planning Process – Elements of Succession Planning

Planning Process
The earlier the financial plan starts, the more time there will be to adjust it based on changes in personal, family or succession situation.
Elements of Succession Planning
Estate planning includes various financial strategies and legal tools:
Will: This legal instrument provides instruction on what to do upon death of its owner. Wills represent a legal commitment. However, they may be changed or cancelled at any time before the death of an asset’s owner, unless the person becomes mentally incompetent.
Giving assets as inheritance:This strategy consist of granting, as part of the inheritance, properties or assets while the owner is still alive; in order to avoid payment of taxes when receiving these properties or assets upon death.
Trust Fund: This is a legal and financial instrument designed exclusively to protect assets from tax burdens, and distribute them according to the provisions set forth by the trustor.
Life Insurance: A life insurance policy is a key element in succession planning. It may be used to pay estate taxes and mortgage debts, and to provide immediate liquidity to cover unexpected expenses, such as “legal” and funeral costs. It is also one of the instruments that allows for charitable contributions or to guarantee income for beneficiaries.